Whatever one’s beliefs and attitude toward religion, the angel’s message recounted in the Gospel of Luke is worthy of careful consideration in these times of such economic uncertainty: “Fear not: for, behold, I bring you good tidings of great joy … . “

Or, in the more prosaic terms of an economic cheerleader: “For goodness sake, stop being so afraid, take a good look around and open your hearts and minds to the possibility of joy.”

Seems like good advice for a people who’ve just been counted in a constitutionally mandated census, are engaged in a seemingly perpetual and inescapable war with terrorism and are just beginning to emerge from the longest economic downturn in 80 years, a financial collapse that has put many among us out of their homes and kept many more stuck in homes worth less that what they paid for them.

So what exactly — from a pragmatic, economic perspective — is the message of this Pollyanna-ish angel? Don’t we have good reason to be afraid, inward-looking and sorrowful? What’s to be joyful about?

Well, from the “Put the $ back in Christmas” crowd, the news is, if not positively joyful, at least cautiously optimistic.

Retail sales are up compared to last year, and that fact, coming on top of the continuing declines in both consumer debt and home prices, indicates a turning point in consumer behavior.

Combined with the generally positive tourist season we had through last summer and fall, consumer spending constitutes a bit of good tidings for the Maine economy.

And even the census numbers are surprisingly positive.

Just last spring, in the midst of the European debt crisis and the worst of the fears about a double-dip recession, many prognosticators were saying that census figures would show that Maine was losing population, and, even worse, that New Hampshire would pass us in overall population. Neither projection, in fact, came to pass.

Maine’s population increased by more than 53,000 people over the 2000 to 2010 decade.

That amounted to an increase of 4.2 percent, far less than the national average of 9.7 percent, but not far behind our Granite State neighbor’s 6.5 percent growth and well above Michigan’s negative growth and Rhode Island’s less than half a percent growth.

So a close look at our numbers gives some reason for joy. In fact, if we look still closer, there is even more good news.

What, exactly, does the “official,” April 1, “resident” population mean in Maine?

In many ways, the number of people living in Maine on April 1 says as much about our year-round economy as the temperature on April 1 says about our year-round climate. They may be accurate averages, but they don’t say much about what it’s like in August or January.

Given the strength of our tourism sector and our large number of seasonal residents, Maine’s “effective” or “economically relevant” population is far greater than the official April 1 census count.

Then look at housing.

As I noted several weeks ago, housing prices in Maine have fallen, many homeowners are underwater and some have lost their homes to foreclosure.

But in none of these measures is Maine suffering as much as many other areas of the country. And, perhaps even more importantly, Maine banks are not, for the most part, burdened with piles of bad loans forcing them to be extra stingy on new loan applications and seeking to raise additional capital rather than make new loans.

Should more signs of a turnaround in demand appear, Maine banks should be able to provide needed financing.

Finally, take a look at the labor market.

In November 2010, Maine’s seasonally adjusted unemployment rate stood at 7.3 percent, well below the national rate of 9.8 percent.

Since November 2009, the number of unemployed people in Maine dropped by more than 6,200 — perhaps not tidings of great joy, but clearly good news.

But that’s not the whole story. Over the same period, the number of employed Mainers also dropped by more than 1,500.

How can both unemployment and employment fall? Simple: having people leave the labor market.

Since November 2009, nearly 7,800 people have left Maine’s labor market altogether, neither employed nor unemployed.

In fact, since November 2008, nearly 10,000 people have left Maine’s labor market. Have they retired? Gone back to school? Moved away? Just given up looking for a job?

For our economy, that’s the real puzzle. Where are our workers? However much consumers may come back into our stores, and wherever housing prices hit bottom and however much banks may be willing to lend, if we don’t have people willing and able to work, we won’t have an economic recovery.

This — the question of workers — is the economic mystery we must ponder.

Charles Lawton is senior economist for Planning Decisions, a public policy research firm. He can be reached at:

clawton@maine.rr.com

 

Copy the Story Link